CIT in talks with JP Morgan, Goldman for short-term funds: report
18 Jul 2009
CIT Group Inc, a leading provider of financing to small businesses and middle market companies, is in talks with JPMorgan Chase & Co and Goldman Sachs Group Inc for short-term funds, as it tries to avoid bankruptcy, reports quoting sources close to the company said.
A CIT Group Inc statement also said its board of directors and management, in consultation with their advisors, is continuing to evaluate alternatives to improve the company's liquidity.
CIT, which gained the status of a bank holding company in December, in order to make itself eligible to draw $2.33 billion from the Treasury's Troubled Asset Relief Programme, said it needed between $2 billion and $3 billion of additional financing to avoid bankruptcy.
The company said it was also in talks with bondholders about a debt for equity swap, sources said. CIT's bondholders are holding another conference call. They are expected to pursue a "debt for new debt" exchange rather than a debt for equity exchange.
The company may also go for a potential sale of assets to raise capital, sources said.
New York-based CIT has more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. It has been a member of the S&P 500 and Fortune 500 indices.